- 44 -
the FACC option given to Mr. Hill. The valuation specialist
consulted by the conservator concluded (in the fall of 1994) that
the FACC option had no value, because of the multiple variables
that might affect the relative values of the FABG and FACC stock
during the 5-year period before the FACC option was exercisable
(in October 1999). This view of the value of the FACC option
figured prominently in the valuation specialist's conclusion that
the $118 price was fair. Rod's experts disagreed and convinced
the district court that the FACC option had significant value.
We are persuaded that the value of the FACC option became
easier to discern over time, as the exercise date drew nearer,
and that later in the 5-year option period it became clear that
FACC stock would be more valuable than FABG stock on the exercise
date, rendering the FACC option more valuable. Indeed, the
parties have stipulated that FABG was willing to pay more for
decedent's FABG stock in 1997 than it offered in connection with
the 1994 Agreement because of the higher value FABG assigned to
the Hill Rights in 1997. Thus, the disparity in the $217.50 per-
share price obtained for the stock by Rod in August 1997 and the
$118 per-share price in the 1995 FSA is attributable, at least in
part, to the passage of time and the apparent appreciation of the
FACC stock in relation to the FABG stock over that period, and
not to any deliberate undervaluing of the stock in the 1995 FSA.
This factor bolsters the conclusion that the terms of the 1995
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